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Insurance MediationInsurance Mediation

Happy Thanksgiving!!!

What is Andy Dershowitz’sWhat is Andy Dershowitz sethical response?

a)You know I can’t do that Rock It’s getting a)You know I can t do that, Rock. It s getting close to the end of the year and my billing is way down. This has to be a full day for me.

b)No can do, bud. You know I have to think of the best interests of Phil and Dillary. I may not have voted for ‘em, but I have to give , gthem my best efforts today -- whether they’re covered or not.

c)How about we split the difference and c)How about we split the difference and conclude after lunch. I heard the deli is running a special today on hot wings.

d)I’ll have to call the Florida Bar Ethics Hotline at (800) 235-8619 and get back to you on that.

Rule 4-1.7: Conflict of Interest; C t Cli t Current Client

(e) Representation of Insureds:( ) pUpon undertaking the representation of an insured client at the expense of the an insured client at the expense of the insurer, a lawyer has a duty to ascertain whether the lawyer will be representing whether the lawyer will be representing both the insurer and the insured as clients or only the insured and to clients, or only the insured, and to inform both the insured and the insurer regarding the scope of the regarding the scope of the representation.

Comment [16] The unique tripartite relationship of insured, insurer, and lawyer p , , ycan lead to ambiguity as to whom a lawyer represents. In a particular case, the y p p ,lawyer may represent only the insured,[or] both as dual clients. Establishing clarity as g yto the role of the lawyer at the inception of the representation avoids pmisunderstanding [or] confusion and inconsistent expectations that may p yarise.

“What is Andy Dershowitz’sethically correct response?”

a) “Of course not. I’m ethically obligated to serve your best interests. Besides, who are you going to get that’s better than are you going to get that s better than me?”

b) “Yes.”)c) “Hillary, you and Phil are both lawyers.

You don’t need me to answer that question.”

d) I’ll have to call the Florida Bar Ethics H tli t d t b k t Hotline at (800) 235-8619 and get back to you on that.

Rule 4-1.7 Conflict of Interest: General Rule1. If an attorney represents multiple clients in one y p pproceeding he/she must advise all clients of the advantages and risks of one attorney representing

lti l li tmultiple clients.2. If an attorney is hired by the insurance company the attorney has an obligation to:the attorney has an obligation to:a. Ascertain from the insurance company if he/she is representing both the insurance company and the representing both the insurance company and the insured, or if the attorney only represents the insured.b The attorney needs to inform both the insurance b. The attorney needs to inform both the insurance company and the insured of the scope of his/her representation.c. All other Florida Bar rules regarding conflicts of interest apply to this relationship.

Rule 4-1.2 Scope of Representation3. A lawyer shall abide by the clients decisions concerning the objectives of the g jrepresentation. A lawyer shall consult with the client regarding which means will be used to achieve the clients objectives. A lawyer shall abide by a client’s decision whether to make

t ttl t ffor accept a settlement offer.

What should Andy do? ya) Tell his clients that they may choose to settle

the case if they are willing to contribute $50k the case if they are willing to contribute $50k to meet the Plaintiff’s demand.

b) Tell the mediator and his clients that the )parties are too far apart and pack up to go home.

c) Tell Attic s Finch the mediato to o k on c) Tell Atticus Finch, the mediator, to work on Rochelle some more.

d) Hold a press conference to announce that this ) pcase is all about whether the First Lady should receive a salary.

) I’ll h t ll th Fl id B Ethi H tli e) I’ll have to call the Florida Bar Ethics Hotline at (800) 235-8619 and get back to you on that.

Rule 4-1.4 CommunicationRule 4 1.4 Communication(a) Informing Client of Status of RepresentationRepresentationA lawyer is required to keep each client

bl i f d d t tl l reasonably informed and to promptly comply with each clients reasonable requests for informationinformation.(b) Duty to Explain Matters to ClientA lawyer is also required to explain matters to the extent necessary for a client to make i f d d i i informed decisions.

Rule 4-1.7 Conflict of Interest: General rule(f) Compensation by Third Party.If an attorney is accepting compensation from anyone other than the client, he or she must:

(1) Inform client and get consent;

(2) Ensure that continued independent professional judgment and attorney-client relationship remains; judgment and attorney-client relationship remains; and

(3) Abide by rule 4-1.6 as it relates to protection of information relating to representation of a client.

Comment [9] present an example: “[W]hen an insurer and its insured have conflicting interests in a matter and its insured have conflicting interests in a matter arising from a liability insurance agreement and the insurer is required to provide special counsel for the insured the arrangement should assure the special insured, the arrangement should assure the special counsel's professional independence.”

Is there a problem here?a) Not really. Phil and Dillary are employing ethical

tactics of persuasion to get Andy to tell the insurance company to pony up more money to settle the case.

b)Yes. AllSafe’s dec action, which seeks to rid the insurer of any obligation in the case, creates a conflict of y g ,interest between AllSafe and the Defendants.

c)Yes Phil is not telling the truth He tripped Rochelle on c)Yes, Phil is not telling the truth. He tripped Rochelle on purpose.

d)Yes. Dillary is not telling the truth. She threw a gravy boat at Phil and Rochelle.

e) I’ll have to call the Florida Bar Ethics Hotline at (800) 235-8619 and get back to you on that.

Rule 4-3.2 Expediting LitigationA lawyer is required to reasonably expedite y q y plitigation as is consistent with the interests of his or her client.

Rule 4-1.4 (b) CommunicationThe attorney must also reasonably inform the The attorney must also reasonably inform the client so as to allow him or her to make informed descisions about representation.

Rule 4-1.6 (a) Confidentiality of InformationA tt i i d t k i f ti An attorney is required to keep information acquired as part of representation confidential, even if a third party is compensating the attorney.

Is Defense Counsel accurate that because the pending claims reasonably exceed the policy limits pending claims reasonably exceed the policy limits, that the The Allsafe Insurance Company does not have an obligation to investigate Ms. Hareless’ l i i it M H l t th Gl b l M di ti claim or invite Ms. Hareless to the Global Mediation

Conference?

(a) Yes.(b) No.(c) Maybe.(d) He should have called the Florida B Ethi H tli b f i i th t Bar Ethics Hotline before giving that advise.

Based on the Farinas v. Florida Farm Bureaud G ’l N t’l S M hand Gen’l Nat’l Sec v. Marsh cases---

Allsafe has a duty to its insured to fullyinvestigate all claims and invite all potentialinvestigate all claims and invite all potentialclaimants to a Global Mediation. Defensecounsel has an obligation to counselcounsel has an obligation to counselAllsafe on the “bad faith” ramifications ofnot completely investigating andnot completely investigating andattempting to settle all claims.

Given the Mediator’s statements to Albertas they were walking to caucus does theas they were walking to caucus, does themediator have any obligations to withdrawfrom serving as mediator in this case?g

(a) Yes.( )

(b) No. He got the case settled for $500,000 for each Albert and Charlie so there was clearly no bias or impartiality.no bias or impartiality.

(c) Only if Charlie finds out about his conversation with Albert.

(d) I think the mediator better call the Florida Ethics Hotline.

The Florida Rules for Certified and Court Appointed MediatorsAppointed Mediators

Rule 10.330 Impartiality (a) Generally. A mediator shall

i i i i li h h hmaintain impartiality throughout themediation process. Impartiality meansfreedom from favoritism or bias inword, action, or appearance, andincludes a commitment to assist allparties, as opposed to any oneparties, as opposed to any oneindividual.(b) Withdrawal for Partiality. A

di t h ll ithd fmediator shall withdraw frommediation if the mediator is no longerimpartial.

During the mediation, a mediator shall maintain impartiality even while maintain impartiality even while raising questions regarding the reality, fairness equity durability and fairness, equity, durability and feasibility of proposed options for settlement In the event settlement. In the event circumstances arise during a mediation that would reasonably be mediation that would reasonably be construed to impair or compromise a mediator’s impartiality the mediator mediator s impartiality, the mediator is obligated to withdraw.

Is Defense Counsel in violation of the Rules of Professional Conduct by representing both of Professional Conduct by representing both

the Allsafe and Wanafry?

(a) No, because The Rules of Professional Conduct allow Defense Counsel to represent both an insured and an pinsurer

(b)Y b D f C l h (b)Yes, because Defense Counsel has a conflict under the Rules of Professional Conduct and therefore

t t b th ti cannot represent both parties

(c) Defense Counsel better call the (c) Defense Counsel better call the Florida Ethics Hotline

- While it is true that Rule 4-1.7(e) wouldallow Defense Counsel to represent bothAllsafe and Mr Wanafry in this particularAllsafe and Mr. Wanafry, in this particularcase it appears clear that Defense Counselhas a conflict. Defense Counsel now knowsthat Hareless has a potential claim for atthat Hareless has a potential claim for atleast $200,000.- By trying to settle the matter at the policyy y g p ylimit with Charlie and Albert only, DefenseCounsel could leave Mr. Wanafry exposed toa claim by Hareless. While Allsafe has ani t t i “b i d ” ith th tiinterest in “being done” with the action,Wanafry has an interest in protecting himselffrom later claims by Hareless as well as fromth l i b Alb t d Ch lithe claims by Albert and Charlie.- The positions of the Allsafe and Wanafryare therefore in conflict and Rule 4-1.7(a)are therefore in conflict and Rule 4 1.7(a)states:

“[A] lawyer shall not represent a “[A] lawyer shall not represent a client if (1) the representation of a client will be directly adverse to client will be directly adverse to another client, or (2) there is a substantial risk that that the substantial risk that that the representation of 1 or more clients will be materially limited by the lawyer’s be materially limited by the lawyer’s responsibilities to another client, a former client or a third person or by a former client or a third person or by a personal interest of the lawyer.”

And – in case you are wondering And in case you are wondering about Rule 4-1.7(e), here it is…..

Rule 4 1 7(e) states: “Upon undertakingRule 4-1.7(e) states: Upon undertakingthe representation of an insured client atthe expense of the insurer, a lawyer has ap , yduty to ascertain whether the lawyer will berepresenting both the insurer and theinsured as clients or only the insured andinsured as clients, or only the insured, andto inform both the insured and the insurerregarding the scope of the representation.All other Rules Regulating the Florida Barrelated to conflicts of interest apply to therepresentation as they would in any otherrepresentation as they would in any othersituation.”

Under these circumstances, does Defense Counsel have an obligation to advise Wanafry that:

(a) A probability exists that the value of theclaimants’ claims will exceed the policylimitslimits.

(b) He has the opportunity and right to retain(b) He has the opportunity and right to retainand consult with a personal attorney.

(c) Both (a) and (b).

(d) That he called the Florida Bar EthicsHotline and they never got back to him.

In this case, we have already determinedIn this case, we have already determinedthat a conflict of interest exists betweenDefense Counsel and Wanafry under Rule 4-1.7(e). Further, Defense counsel andWanafry “just met,” and thus there hasb t it f W f t idbeen no opportunity for Wanafry to provide“informed consent” to the representationunder Rule 4-1 7(b)(4) Additionally sinceunder Rule 4 1.7(b)(4). Additionally, sincethey just met, Defense Counsel has notprovided Wanafry with a copy of thep y py“Statement of Insured’s Client’s Right’s”.Defense Counsel therefore needs to adviseW f f hi “ i h ” i l diWanafry of his “rights” including:

8. Your Risk. If you lose the case, theremight be a judgment entered against youfor more than the amount of yourinsurance, and you might have to pay it.Yo l e h d t to d i e oYour lawyer has a duty to advise youabout this risk and other reasonablyforeseeable adverse resultsforeseeable adverse results.

9. Hiring Your Own Lawyer. The lawyer provided by the insurance company is representing you only to defend the lawsuit representing you only to defend the lawsuit. If you desire to pursue a claim against the other side, or desire legal services not directly , g yrelated to the defense of the lawsuit against you, you will need to make your own arrangements with this or another lawyer arrangements with this or another lawyer. You also may hire another lawyer, at your own expense, to monitor the defense being provided by the insurance company. If there is a reasonable risk that the claim made against you exceeds that the claim made against you exceeds the amount of coverage under your policy, you should consider consulting another lawyer.

* We have complete copies of “Statement of Insured’s Client’s Right’s” if anyone would like a copy.

A lawyer shall not represent a client if the lawyer’s exercise of independent professional y p pjudgment in the representation is ______________ limited by the lawyer’s own inte estsinterests:

(1) in any way;(2) completely;(2) completely;(3) slightly; OR( ) i ll(4) Materially

Unless…..????

(1) the lawyer reasonably believes that the lawyer will be able to provide competent and lawyer will be able to provide competent and diligent representation;

(2) the representation is not prohibited by law;(3) the representation does not involve the

assertion of a position adverse to another client when the lawyer represents both y pclients in the same proceeding;

(4) the client gives informed consent; OR(5) All f h b(5) All of the above.

Explanation: Florida Rule of Professional Explanation: Florida Rule of Professional Conduct 4-1.7(b) provides that a lawyer should not represent a client if the representation of p pthat client is directly adverse to the lawyer or another client. Comment to Rule 4-1.7 states that: “[l]oyalty and independent judgment are that: [l]oyalty and independent judgment are essential elements in the lawyer’s relationship to a client.” Likewise, “[t]he lawyer’s own , [ ] yinterests should not be permitted to have adverse effect on representation of a client.” Fla Rules of Prof’l Conduct R 4 1 7 cmt Fla. Rules of Prof’l Conduct R. 4-1.7 cmt. (2012).

T /F l True/False:

Attorney Teaparty and Attorney Radical are prohibited from signing the Confidential Settlement Agreement gsince they will not be parties to the divorce lawsuit?divorce lawsuit?

False

Explanation: There is nothing in the Rules of Professional Conduct which specifically prohibits an attorney from executing a settlement agreement attorney from executing a settlement agreement. However there are restrictions on a lawyer participating in any agreement in which a restriction of the lawyer’s right to practice is part of the settlement of a client right to practice is part of the settlement of a client controversy.

A th it R l 4 5 6 R t i ti Ri ht t Authority: Rule 4-5.6. Restrictions on Right to PracticeA lawyer shall not participate in offering or making:y p p g g(a) a partnership, shareholders, operating, employment, or other similar type of agreement that restricts the rights of a lawyer to practice after termination of the rights of a lawyer to practice after termination of the relationship, except an agreement concerning benefits upon retirement; or(b) an agreement in which a restriction on the lawyer's (b) an agreement in which a restriction on the lawyer s right to practice is part of the settlement of a client controversy.

Caveat: In a personal injury context, the p j y ,Professional Ethics Committee of the Florida Bar in 2005 advised that a lawyer may participate in a settlement agreement may participate in a settlement agreement in which the insurance company deposits directly into a client’s financial account only y ythe portion of the settlement proceeds owed to the client, but may not participate in a settlement if the funds deposited in a settlement if the funds deposited directly into the client’s financial account include attorney’s fees, costs and funds to y ,which a third party may have a claim. RPC: 5-1.1(e)OPINIONS: 00 2 02 See Ethics Opinion OPINIONS: 00-2, 02. See Ethics Opinion 00-2 Reconsidered January 21, 2005.

Is the $500k penalty clause proposed by Rightwing for breach of the confidentiality g g yagreement enforceable?

NoNo

Explanation: Florida law provides that Explanation: Florida law provides that although generally liquidates damages clauses are enforceable, they will be held clauses are enforceable, they will be held invalid where their purpose is to deter or punish. Goldblatt v. C.P. Motion, 77 So.3d punish. Goldblatt v. C.P. Motion, 77 So.3d 798 (3rd DCA 2011). “[a] Liquidated damages provision operating as a penalty da ages p o s o ope at g as a pe a tyare improper and not enforceable by courts.” See National Service Industries, ou s S a o a S dus s,Inc., 395 So.2d 1280 (Fla. 2d DCA 1981).

What is the key to a good h k i i di ?Thanksgiving dinner?

The Tur-KEY!!!